Investor Relations
Latest Results
Preliminary Results for the year ended 30 November 2011
WH Ireland (AIM: WHI), an established financial services group operating in Private Wealth Management and Corporate Broking, today announces its Preliminary Results for the year ended 30 November 2011.
Operational summary
- Significant new client wins during the period, with an increase of over 500% in funds raised for corporate clients
- New fund launched to benefit from the Enterprise Investment Scheme legislation
- Number of significant new hires made to strengthen the team across Private Wealth Management and Corporate Broking divisions
Financial summary
- Group turnover increased by 25.9% to £23.1m (2010: £18.4m)
- Full year adjusted* profit before tax £2.2m (2010: loss £0.3m)
- Full year statutory loss before tax £1.4m (2010: £0.7m)
- Adjusted* earnings per share of 9.33p (2010: 0.08p)
- Basic loss per share of 8.00p (2010: 1.75p)
- Year-end cash balances increased to £7.4m (2010: £2.4m)
* Adjusted profit / (loss) before tax is stated after adding back impairments to property and goodwill and loss on disposal of associates (see note 3).
Rupert Lowe, Chairman of WH Ireland, commented: "2011 was a period of strong progress for WH Ireland, as we made a number of significant hires, won 14 new corporate clients, and raised considerably more funds for our corporate clients than in the previous year. The Group's focus on growing companies positions us well for the EIS legislation changes, and the adjusted* profit before tax of £2.2 million demonstrates the considerable progress that has been made during the period."
Chairman's statement
It is pleasing to be able to report to our shareholders that the Group has delivered a successful outcome for the year ended 30 November 2011. In the financial period we have improved our cash reserves, our adjusted profitability and our turnover.
During the course of the year under review we have considerably strengthened our client base, in the process raising £100 million to help some exciting small companies to finance their business against the backdrop of a severely dysfunctional banking market. We have improved our position relative to many of our competitors, attracted many new and able members of staff to join our existing team and, at the same time, overhauled and simplified the incentive structure for existing staff resulting in a more transparent and fairer reward for those who produce our revenues. The process of improving the service provision whilst reducing costs continues and includes investment in a new and more comprehensive IT platform. Credit for the progress we have made should be given to all our staff, as it is their energy and drive that propels our progress.
The new Enterprise Investment Scheme (EIS) legislation introduced in the 2011 budget by George Osborne plays to the strengths of a broker such as WH Ireland with both private and corporate clients. With this in mind, we have set up a fund to allow our private clients to benefit from the tax breaks available when we invest their money in fast growing and exciting AIM listed companies. We are very enthusiastic about this area of our business and would encourage any shareholders who are interested to view our website (www.wh-ireland.co.uk) and contact us for further details or a presentation.
It is now clear that many of our competitors allowed their fixed cost base to become excessive. The recent prolonged downturn has exposed this weakness and, as a result, many broking companies have either been closed down or forced to merge. These pressures have been exacerbated by an increasingly expensive regulatory environment and have resulted in many very talented people losing their jobs. The result is that we are now able to recruit such people on sensible and fair incentive packages with the recent stability of WH Ireland making us an attractive place to work. The old adage that "wealth is created in booms but dynasties are made in depressions" may be overstating the case but I believe success is based on positive momentum and on that basis we have the conditions to continue our progress.
The new financial year has started well in terms of revenue, new clients and also new members of staff. The Sovereign debt situation in Europe continues to be a concern to the fragile economic recovery. The resolution of this malaise will not be straightforward, as the current situation in Greece exemplifies. However, with Bond yields at historically very low levels, quantitative easing and an equity market which offers some attractive yields in the current low interest rate environment, there are grounds for some optimism.
There are some exciting small companies who need investment in order to grow and WH Ireland is very well placed to help them, together with our private clients and wealth management clients. As a part of our ongoing development, I am pleased that we have been successful in our recent acquisition from Pritchard Stockbrokers Limited of 8,000 active private clients with £400m of non cash assets under management. This will result in some hard work to integrate this business, but will serve to continue the growth of our regionally based private client business, thereby balancing the growth of WH Ireland.
Rupert Lowe
Non-Executive Chairman
Chief Executive's Report
In a year which the Chief Executive of one of our main competitors described as being, "Maybe the worst operating climate for almost a century", I am pleased to say that WH Ireland has performed well.
Revenues increased by 26% from £18.4m to £23.1m, and the adjusted profit before tax increased from £(0.3)m to £2.2m. The statutory loss before tax, which includes the write downs of goodwill and property and the loss on disposal of associates, increased from £0.7m to £1.4m.
Perhaps more importantly this improvement was reflected in cash balances rising by over 200% from £2.4m to £7.4m; funds raised for corporate clients rising by over 500% from £16m to £97m and 14 new brokerships being won. Since the year end, new quoted client wins and new fundraisings have continued.
The Group's focus was improved during the year with the sale of the remaining 37% of WHI Australia Pty Limited, the holding company of DJ Carmichael Pty Limited. Whilst the Australian stockbroking market offers many opportunities, the Board did not feel it was appropriate for a relatively small group such as ours to continue with such a broad spread of interests. The mainstream fund management business was also closed to continue to focus these efforts and overall 34 people left the Group in the year, with termination costs being incurred against administration expenses.
The dislocation that has and is occurring in the small company broking sector has created a fertile environment for client wins, but also has freed up high quality staff. Without incurring any headhunter fees we have made ten significant hires from Altium, Religaire, Collins-Stewart, Investec and Westhouse in recent months. Our Corporate Broking team is now scaled to handle over 100 clients, a level at which we would have achieved critical mass.
Our Private Clients division continued to provide solid earnings, with funds under nominee control of £1.4bn. The recent acquisition of the client list from Pritchard Stockbrokers Limited should increase this figure by 25% and we are also expanding our regional office team as a result. Progress was made in the Wealth Management division and your Board remains confident in the validity of building up this activity alongside the well established Private Client stock broking offering, particularly with the likely impact of the Retail Distribution Review (RDR) on small independents.
During the course of the year the Government focused on the EIS as a means of stimulating the small company sector. Incentives were improved and the size of company to which they applied was increased with effect from April 2012 onwards. WH Ireland is at the forefront of developments in this field, which it sees as being beneficial to all divisions of the Group.
Despite the uncertainties in the markets, your Board is confident of progress in the year ahead. As such we will seek shareholder approval for an ongoing share buy back programme. The achievements of the past year could not have been made without the efforts of our staff. Their confidence in the firm's future was shown by a 56% take up in our new Save as You Earn scheme and numerous employee purchases. Focused on small company Corporate Broking and on Private Wealth Management, well financed and growing both organically and through acquisition, WH Ireland has a strong future.
Paul Compton
Chief Executive
Consolidated statement of comprehensive income
For the year ended 30 November 2011
| Year ended | Year ended | ||
| 30 November | 30 November | ||
| 2011 | 2010 | ||
| Note | £'000 | £'000 | |
| (as restated, note 9) | |||
| Revenue | 23,142 | 18,379 | |
| Administrative expenses | (24,191) | (19,210) | |
| Operating loss | (1,049) | (831) | |
| Other income | 27 | 45 | |
| Investment (losses) / gains | (13) | 259 | |
| Fair value losses on investments | (141) | (72) | |
| Finance income | 63 | 54 | |
| Finance expense | (60) | (90) | |
| Share of profit of associates | 6 | 63 | 226 |
| Loss on disposal of associates | (331) | (311) | |
| Loss before tax | (1,441) | (720) | |
| Tax (expense) / credit | (246) | 351 | |
| Loss for the year | (1,687) | (369) | |
| Other comprehensive income: | |||
| Valuation gains / (losses) on available for sale investments | 182 | (192) | |
| Transferred to profit or loss on sale of investments | (30) | (31) | |
| Tax relating to components of other comprehensive income | (34) | 60 | |
| Total other comprehensive income | 118 | (163) | |
| Total comprehensive income | (1,569) | (532) | |
| Loss for the year attributable to: | |||
| Owners of the parent | (1,687) | (369) | |
| Total comprehensive income attributable to: | |||
| Owners of the parent | (1,569) | (532) | |
| Earnings per share for profit to the ordinary | |||
| equity holders of the parent during the | |||
| period | 3 | ||
| Basic | (8.00)p | (1.75)p | |
| Diluted | (8.00)p | (1.75)p | |
Consolidated statement of financial position
As at 30 November 2011
| Group | |||
| As at | As at | ||
| 30 November | 30 November | ||
| 2011 | 2010 | ||
| Note | £'000 | £'000 | |
| (As restated, note 9) | |||
| ASSETS | |||
| Non-current assets | |||
| Property, plant and equipment | 4 | 4,957 | 6,301 |
| Goodwill | 5 | 683 | 2,835 |
| Intangible assets | - | 161 | |
| Associates | 6 | - | 1,156 |
| Investments | 942 | 1,483 | |
| Loan notes receivable | 25 | 335 | |
| Deferred tax asset | 689 | 930 | |
| 7,296 | 13,201 | ||
| Current assets | |||
| Trade and other receivables | 26,656 | 37,205 | |
| Other investments | 418 | - | |
| Corporation tax recoverable | 33 | 21 | |
| Cash and cash equivalents | 7 | 7,366 | 2,439 |
| 34,473 | 39,665 | ||
| Total assets | 41,769 | 52,866 | |
| LIABILITIES | |||
| Current liabilities | |||
| Trade and other payables | (27,193) | (36,495) | |
| Borrowings | (238) | (305) | |
| Provisions | (65) | (149) | |
| (27,496) | (36,949) | ||
| Non-current liabilities | |||
| Borrowings | (1,689) | (1,930) | |
| Deferred tax liability | (421) | (384) | |
| Accruals and deferred income | (144) | (98) | |
| Provisions | (21) | (20) | |
| (2,275) | (2,432) | ||
| Total liabilities | (29,771) | (39,381) | |
| Total net assets | 11,998 | 13,485 | |
| EQUITY | |||
| Share capital | 1,171 | 1,064 | |
| Share premium | 6,406 | 5,724 | |
| Available-for-sale reserve | 165 | 47 | |
| Other reserves | 1,472 | 1,472 | |
| Retained earnings | 3,853 | 5,465 | |
| Treasury shares | (1,069) | (287) | |
| Total equity | 11,998 | 13,485 | |
Consolidated statement of cash flows
For the year ended 30 November 2011
| Group | |||
| Year ended | Year ended | ||
| 30 November | 30 November | ||
| 2011 | 2010 | ||
| £'000 | £'000 | ||
| Note | (As restated, note 9) | ||
| Operating activities: | |||
| Loss for the year | (1,687) | (369) | |
| Adjustments for: | |||
| Depreciation, amortisation and impairment | 4 & 5 | 3,846 | 562 |
| Finance income | (63) | (54) | |
| Finance expense | 60 | 90 | |
| Taxation | 246 | (351) | |
| Share of profit of associates | 6 | (63) | (226) |
| Loss on disposal of associates | 331 | 311 | |
| Changes in investments | 664 | 272 | |
| Gain on sale of property, plant and equipment | 3 | (26) | |
| Non-cash adjustment for share option charge | 75 | (94) | |
| Decrease in trade and other receivables | 10,547 | 5,468 | |
| Decrease in trade and other payables | (9,256) | (8,332) | |
| (Increase) / decrease in provisions | (83) | 22 | |
| (Increase) / decrease in current asset investments | (418) | 855 | |
| Net cash generated from / (used in)operations | 4,202 | (1,872) | |
| Income taxes (paid) / received | (14) | 256 | |
| Net cash in / (out) flows from operating activities | 4,188 | (1,616) | |
| Investing activities: | |||
| Proceeds from sale of property, plant and equipment | - | 291 | |
| Proceeds from sale of investments | 1,273 | 823 | |
| Interest received | 63 | 54 | |
| Disposal of associates | 888 | 75 | |
| Acquisition of property, plant and equipment | 4 | (191) | (81) |
| Acquisition of investments | (1,243) | (665) | |
| Redemption of loan notes | 310 | - | |
| Net cash generated from investing activities | 1,100 | 497 | |
| Financing activities: | |||
| Proceeds from issue of share capital | 7 | - | |
| Decrease in borrowings | (308) | (610) | |
| Interest paid | (60) | (90) | |
| Net cash used in financing activities | (361) | (700) | |
| Net increase / (decrease) in cash and cash equivalents | 4,927 | (1,819) | |
| Cash and cash equivalents at beginning of year | 2,439 | 4,258 | |
| Cash and cash equivalents at end of year | 7,366 | 2,439 | |
| Clients' settlement cash | 3,683 | 1,573 | |
| Group cash | 3,683 | 866 | |
| Cash and cash equivalents at end of year | 7 | 7,366 | 2,439 |
Condensed consolidated statement of changes in equity
For the year ended 30 November 2011
| Share capital £'000 |
Share premium £'000 |
Available- for-sale reserve £'000 |
Other reserves £'000 |
Retained earnings £'000 |
Treasury shares £'000 |
Total equity £'000 |
|
| Balance at 1 December 2009 (as restated, note 9) | 1,064 | 5,724 | 210 | 1,472 | 5,928 | (287) | 14,111 |
| Gains arising on available-for-sale investments | - | - | (223) | - | - | - | (223) |
| Deferred taxation | - | - | 60 | - | - | - | 60 |
| Other comprehensive income (as restated, note 9) | - | - | (163) | - | - | - | (163) |
| Loss after taxation (as restated, note 9) | - | - | - | - | (369) | - | (369) |
| Total comprehensive income (as restated, note 9) | - | - | (163) | - | (369) | - | (532) |
| Employee share option scheme | - | - | - | - | (94) | - | (94) |
| Balance at 30 November 2010 | 1,064 | 5,724 | 47 | 1,472 | 5,465 | (287) | 13,485 |
| Gains arising on available-for-sale investments | - | - | 152 | - | - | - | 152 |
| Deferred taxation | - | - | (34) | - | - | - | (34) |
| Other comprehensive income | - | - | 118 | - | - | - | 118 |
| Loss after taxation | - | - | - | - | (1,687) | - | (1,687) |
| Total comprehensive income | - | - | 118 | - | (1,687) | - | (1,569) |
| Shares options exercised | 1 | 6 | - | - | - | - | 7 |
| Shares issued to ESOT | 106 | 676 | - | - | - | (782) | - |
| Employee share option scheme | - | - | - | - | 75 | - | 75 |
| Balance at 30 November 2011 | 1,171 | 6,406 | 165 | 1,472 | 3,853 | (1,069) | 11,998 |
The total number of authorised ordinary shares is 34.5 million shares of 5p each (2010: 34.5 million shares of 5p each). The total number of issued ordinary shares is 23.4 million shares of 5p each (2010: 21.3 million shares of 5p each). 2,143,218 shares were issued during the year (2010: nil), of which 2,128,000 (2010: nil) are held as Treasury.
The nature and purpose of each reserve is summarised below:
Share premium
The share premium is the amount raised on the issue of shares that is in excess of the nominal value of those shares and is recorded less any direct costs of issue.
Available-for-sale reserve
The available-for-sale reserve reflects gains or losses arising from the change in fair value of available-for-sale financial assets except for impairment losses which are recognised in the income statement. When an available-for-sale asset is impaired or derecognised, the cumulative gain or loss previously recognised in the available-for-sale reserve is transferred to the income statement.
Other reserves
Other reserves comprise a (consolidated) merger reserve of £1,244k (2010: £1,244k) and a (consolidated) capital redemption reserve of £228k (2010: £228k).
Retained earnings
Retained earnings reflect; accumulated income, expenses, gains and losses, recognised in the income statement and the statement of recognised income and expense and is net of dividends paid to shareholders. The cumulative effect of changes in accounting policy is also reflected as an adjustment in retained earnings.
Treasury shares
Purchases of the Group’s own shares in the market are presented as a deduction from equity, at the amount paid, including transaction costs. That is, treasury shares are shown as a separate class of shareholders’ equity with a debit balance.
Notes
The notes are available in the printable pdf of the results. To download it, please click here
Page last up-dated: 23 March 2012